American Coastal Insurance Corporation · NASDAQ:ACIC
American Coastal Insurance — United Insurance Holdings — Investor Presentation (December 2017)
24 slides from American Coastal Insurance's investor presentation, Dec 6, 2017
Slide 1: United Insurance Holdings Corp. Company Presentation December 2017
United Insurance Holdings Corp. NASDAQ: UIHC Company Presentation December 2017
Slide 2: Cautionary Statements
2DECEMBER 2017 INVESTOR PRESENTATION Cautionary Statements This presentation contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward looking statements include expectations regarding our diversification, growth opportunities, re
Slide 3: Management Overview
3DECEMBER 2017 INVESTOR PRESENTATION Management Overview John Forney has served as our Chief Executive Officer and a member of our Board since June 14, 2012. He assumed the additional role of President in July 2013. From 2002 until he joined UIHC, Mr. Forney served in a number of different capacitie
Slide 4: Company Overview
4DECEMBER 2017 INVESTOR PRESENTATION United Insurance Holding Corp. (NASDAQ: UIHC) is the holding company for United Property & Casualty Insurance Company (“UPC”) and its affiliated companies. UPC is a specialized residential and commercial property and casualty insurance underwriter with a geograph
Slide 5: Company Evolution
5DECEMBER 2017 INVESTOR PRESENTATION Company Evolution Merger with American Coastal created a leading specialty cat underwriter in both personal and commercial property Added 3 new Directors with extensive insurance experience Rollout of additional property products in existing states Continue diver
Slide 6: UPC Has a Significant Market Opportunity
6DECEMBER 2017 INVESTOR PRESENTATION UPC Has a Significant Market Opportunity Relative U.S. Hurricane Risk¹ ¹ Source: AIR Worldwide ² Source: Karen Clark & Company Export capabilities to all cat-exposed areas Exposed Property Values ($ billion) ² Coastal Peak State All TIV TIV Coastal TIV 1 New York
Slide 7: Diversification of Premium in-force
7DECEMBER 2017 INVESTOR PRESENTATION Diversification of Premium in-force Premium in-force at 9/30/2017 Total Premium in-force: $1.07 billion 579,908 54% 148,795 14% 88,477 8% 192,521 18% 59,079 6% 488,872 46% FL Northeast Southeast Gulf E&S / Other 72% 28% Personal Lines Commercial Lines By Region:
Slide 8: UPC's Four Proven Pathways for Growth
8DECEMBER 2017 INVESTOR PRESENTATION UPC’s Four Proven Pathways for Growth Organic Underwriting Carrier Partnerships Policy/Portfolio Assumption Mergers & Acquisitions 12,000 Appointed Independent Agencies & MGA’s Nationally – this is our primary focus Highest premium- in-force of any producer Large
Slide 9: Strong Underwriting Performance
9DECEMBER 2017 INVESTOR PRESENTATION Strong Underwriting Performance Underlying annual combined ratio consistently below 90% 1 Catastrophe losses (CAT) include all events in excess of $1 million of incurred losses from 2 or more claims. 2 Underlying combined ratio, a measure that is not based on U.S
Slide 10: Approved Rate Changes Will Further Improve Results
10DECEMBER 2017 INVESTOR PRESENTATION Approved Rate Changes Will Further Improve Results State Rate Chg Prem Inforce Gross Impact FL 8.4% 326,149$ 27,397$ TX 6.5% 119,192$ 7,747$ RI 9.8% 30,306$ 2,970$ MA 5.0% 48,187$ 2,409$ NJ 7.0% 27,017$ 1,891$ Total 42,415$ • UPC has taken positive rate action i
Slide 11: Q3 & YTD 2017 Results
11DECEMBER 2017 INVESTOR PRESENTATION Q3 & YTD 2017 Results Improvements Y/Y excluding CAT Consolidated GAAP ($000) YTD as of September 30, Q3-17 Q3-16 % Chg 2017 2016 % Chg Revenue Gross Earned 268,001$ 173,520$ 54.4% 711,650$ 484,607$ 46.9% Ceded Earned (115,507) (53,299) 116.7% (292,355) (148,837
Slide 12: How Have We Done Over the Long-term?
12DECEMBER 2017 INVESTOR PRESENTATION How Have We Done Over the Long-term? Underlying results represent the true earnings power of UPC Insurance over the long-term Property CAT is inherently volatile Year Ended Key Metrics 12/31/2013 12/31/2014 12/31/2015 12/31/2016 YTD 9/30/17 Gross premium earned
Slide 13: Core earnings are growing
13DECEMBER 2017 INVESTOR PRESENTATION Core earnings are growing EBITDA ¹ EBITDA excluding CAT ¹ Adding back depreciation and amortization to earnings before income tax is important given the significant non-cash expenses related to recent acquisitions Catastrophe losses are core to our property insu
Slide 14: Strong Liquidity & Cash Generation
14DECEMBER 2017 INVESTOR PRESENTATION Strong Liquidity & Cash Generation Holding Co. Liquidity Debt-to-Capital Ratio Cash Flow from Operations $110 $69 $98 $66 $112 $- $20 $40 $60 $80 $100 $120 2013 2014 2015 2016 Annualized Q3-17 12.0% 6.2% 4.9% 18.3% 9.6% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0%
Slide 15: Consistent Growth in Equity
15DECEMBER 2017 INVESTOR PRESENTATION Consistent Growth in Equity 87,986 501,216 $0 $100,000 $200,000 $300,000 $400,000 $500,000 $600,000 2012 2013 2014 2015 2016 Q3-17 GAAP Equity STAT Equity 470% INCREASE IN EQUITY FROM Q4 2012 – Q3 2017 $ in thousands
Slide 16: Conservative Investment Portfolio
16DECEMBER 2017 INVESTOR PRESENTATION Conservative Investment Portfolio • Designed to preserve capital, maximize after-tax investment income & liquidity while minimizing asset & interest rate risk • As of Sept. 30, 2017, 99.7% of the Company’s fixed maturity portfolio was rated investment grade – Av
Slide 17: Reinsurance Philosophy
17DECEMBER 2017 INVESTOR PRESENTATION Reinsurance Philosophy Reinsurance mitigates risk and our track record shows catastrophe losses are earnings events, not capital events We try to balance protection against frequency & severity of loss with risk retained as well as the total cost of premiums ced
Slide 18: 2017-18 Reinsurance Program
18DECEMBER 2017 INVESTOR PRESENTATION 2017-18 Reinsurance Program Layer 1 $200M xs $25M NIL $50M Retention $56M $256M $570M Layer 3 $400M xs $25M NIL Public FHCF 45% of $1.73B xs $535M NIL $539M $2.3B $2.8B 100 YR$1.629B $1.3B Layer 4 $450M xs $25M NIL $2.1B Layer 5 $578M xs $25M NIL Layer 2 $300M x
Slide 19: Conclusion
19DECEMBER 2017 INVESTOR PRESENTATION Conclusion EXTENSIVE MARKET OPPORTUNITY • Permanent dislocation/lack of capacity in windstorm exposed markets • Small market share needed to generate significant premium growth and strong returns • UPC was the 21st largest homeowners insurer in U.S. for 2016 wit
Slide 20: Appendix
20DECEMBER 2017 INVESTOR PRESENTATION APPENDIX
Slide 21: Definition & Reconciliation of Underlying Combined Ratio
21DECEMBER 2017 INVESTOR PRESENTATION Definition & Reconciliation of Underlying Combined Ratio We believe that investors’ understanding of UPC Insurance’s performance is enhanced by our disclosure of the following non-GAAP measures. Our methods for calculating these measures may differ from those us
Slide 22: Definition & Reconciliation of EBITDA
22DECEMBER 2017 INVESTOR PRESENTATION We believe that investors’ understanding of UPC Insurance’s performance is enhanced by our disclosure of the following non-GAAP measures. Our methods for calculating these measures may differ from those used by other companies and therefore comparability may be
Slide 23: Definition & Reconciliation of Other non-GAAP Measures
23DECEMBER 2017 INVESTOR PRESENTATION Definition & Reconciliation of Other non-GAAP Measures We believe that investors’ understanding of UPC Insurance’s performance is enhanced by our disclosure of the following non-GAAP measures. Our methods for calculating these measures may differ from those used
Slide 24: UPC Insurance
UPCC® INSURANCE Keep the Promisee INTERBORO FeMily fares 2 cons Revraner (| mCoastal ¢» ‘A UPC Insurance Company A UPC Insurance Company J A tana oe £
United Insurance Holdings — Investor Presentation (December 2017) on 6ix